INSTANT VIEW 3-Czech Sept C/A gap better than fcast

                                
 PRAGUE, Nov 11 (Reuters) - The Czech current account showed
a 3.69 billion crown ($217.3 million) deficit in September,
smaller than the 5.5 billion gap forecast by analysts, data
showed on Wednesday.
                                
 The current account income balance -- which includes
dividend payments and other profits booked by foreign companies
-- showed a 23.91 billion crown gap, below last year's 28.84
billion but higher than the 19.65 billion gap in August.
                                
 It reflected a dividend payment of 17.0 billion crowns from
Czech subsidiaries to their foreign parent firms and estimated
reinvested earnings of 8.7 billion crowns, the central bank
said. 
                                
 The 12-month rolling deficit dipped to 79.2 billion crowns
($4.66 billion), or 2.2 percent of estimated 2009 nominal gross
domestic product (GDP), according to Reuters calculations.
                                
 The financial account showed an outflow of direct
investments, the third negative reading this year, and a result
of the global financial crisis whih led foreign banks and
corporations to bring capital back home.
****************************************************************
KEY POINTS:
(CZK billions)            Sept          Aug        Sept forecast
Current Account          -3.69         -8.46        -5.5
Financial Account         9.03         22.01         n/a
Net Direct Investment    -7.63          4.14         n/a

 (For full table, double click on [ID:nPRA004847])
                                
 
 - The balance of goods showed a 20.1 billion surplus, and the
services balance ran a surplus of 3.9 billion.
 - The balance of current transfers includes a deficit of 1.6
billion crown on transfers from the Czech Republic to the EU
budget. On the capital account, a total of 0.2 billion crown was
drawn from the EU budget.
- Capital inflow on the financial account was approximately 9.0
billion crown under ECB methodology.
- Direct investment showed a net outflow of 7.6 billion crowns,
due to acquisitions abroad, equity cuts by foreign owners at
some Czech subsidiaries and credit provided within investment
groups.
- Sales of equity and debt securities from non-bank portfolios
and purchase of government bonds by foreign investors led to net
inflows of portfolio investment of 9.8 billion crown.
- Foreign bond issues improved balance.
- Other investment showed a surplus of 6.8 billion crowns, due
to a change in the short-term international position of banks (a
decline in short-term assets and a rise in short-term
liabilities).
- Central bank foreign currency reserves (adjusted for valuation
changes) fell by 1.1 billion crowns.
                                
  
 COMMENTARY:
                                
 MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
                                
 "Foreign Direct Investment recorded an outflow of 7.6
billion crowns, which was caused mainly by acquisitions by power
company CEZ <CEZPsp.PR>.
                                
 "Profit repatriation is the main reason for the negative
income balance. However, lower profits at domestic companies
should reduce this outflow, which should lead to an improvement.
                                
 "Overall we expect an improvement this year in the current
account balance from the last year, to as little as -1.6 percent
of GDP. Next year we should see a lower foreign trade surplus,
which should deepen the current account gap toward 2.4 percent
of GDP."
                                
 
                                
 PETR DUFEK, ANALYST, CSOB
                                
 "The current account didn't bring any surprise. Mainly it is
thanks to a high surplus in the trade balance holding the
current account at low levels, and that is despite the outflow
of dividends."
                                
 "Overall it is good news for the crown because the inflow of
investment smoothly covers the low current account gap, despite
September FDI of Czech firms abroad being relatively high."
                                
 
                                
 PAVEL MERTLIK, CHIEF ECONOMIST, RAIFFEISENBANK
                                
 "The current account balance in September ended in a
deficit... in line with market expectations."
                                
 "The news is neutral for the crown. We also leave our
expectation for this year's overall deficit of 50 billion crowns
unchanged."
                                
 
  MARKET REACTION:
                                
 The crown trades flat at 26.410 to the euro <EURCZK=> after
the data, and down from a six-week high of 25.325 seen ealrier
on Wednesday.
                                
 
  BACKGROUND:
- Analyst expectations before data release        [ID:nL3705979]
- Czech Sept foreign trade figures                [ID:nL6542741]
- Polish Sept C/A data                            [ID:nLA628048]
- Slovak Aug C/A data                            [ID:nBSD002247]
- Hungary's Q2 C/A gap                            [ID:nLT293744]
- Report on last Czech c.bank rate decision.......[ID:nL4183884]
                                
 [ID:nPRG003761] [ID:nL5208270 [ID:nL5527536] [ID:nPRA004836]

LINKS:
- For further details on September of payments numbers and past
data, Reuters 3000 Xtra users can click on the Czech National
Bank's website:
                                
 http://www.cnb.cz/en/statistics/bop_stat/

- For LIVE Czech economic data releases, click on       <ECONCZ>
- Instant Views on other Czech data                 [CZ/INSTANT]
- Overview of Czech macroeconomic indicators            [CZ/ECI]

- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH]
- For Czech money markets data click on                <CZKVIEW>
- Czech money guide                                      <CZK/1>
- Czech benchmark state bond prices                   <0#CZBMK=>
- Czech forward money market rates                      <CZKFRA>

 (Reporting by Jan Lopatka)